Hope springs for retrenched Boseto workers
Staff Writer | Tuesday June 23, 2015 18:04
The takeover bid for the mine near Maun, which is currently under provisional liquidation goes before the High Court today for final endorsement.
If granted, the ratification would pull the mine out of liquidation and provide hope to some of the 800 miners who lost their jobs in February. The provisional liquidation comes after Boseto’s parent company, Discovery Copper Botswana (DCB), was declared insolvent early this year.
In a statement, the CA announced it had determined to authorise the proposed acquisition on the grounds that firstly; the analysis of the facts of the case show that there were no competition concerns to arise in the market for exploration and mining of copper and silver concentrates.
“Secondly, the authority took cognisance of the fact that Discovery Copper Botswana was a failing firm as it was placed on provisional liquidation by the High Court of Botswana and has since ceased to operate. Furthermore, the acquisition is expected to resuscitate the operations of DCB and therefore benefit the economy of Botswana through job creation and export growth of copper/silver mineral,” reads the statement.
Creditors of Boseto Mine’s parent company, Discovery Copper Botswana, also recently approved a $34.5 million (P330 million) offer of compromise for the mine from Cupric Canyon’s Khoemacau Copper Mining.
However, the CA stated, the approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to this merger must comply with under the Laws of Botswana.
Pursuant to an application made by Standard Chartered Bank, DCB was early this year placed under provisional liquidation after failing to meet its financial obligations amounting to over $137 million (P1.3 billion) to various creditors. In a meeting held in Gaborone last Friday, creditors unanimously agreed to accept an offer from Barclays-backed Cupric Canyon, to take over the mine.
Provisional liquidators of the mine, Deloitte, are now expected to take the matter to the High Court today for sanctioning.
From the $137 million total liabilities, $103 million is owed to secured lenders, $4 million to government and $30 million to unsecured creditors.
The creditors syndicate comprises of Standard Chartered Bank, Credit Swiss, Caterpillar Finance and Cupric Canyon, which is taking over. Government will receive 100 percent of the amount owed, while secured lenders will get 22 percent of the $103 million while unsecured creditors will receive 20 percent of the $30 million owed.
Cupric Canyon, through a local subsidiary Khoemacau, is also expected to open another copper mine in the same area as Boseto next year. Khoemacau has been granted a mining licence by government. It plans to mine 3.6 million tonnes of ore per annum to produce 50,000 tonnes of copper concentrate.
Barclays Natural Resources owns 97 percent of Cupric Canyon, which in turn has 100 percent shareholding in Khoemacau Copper Mining.